The Race Is On As The UK National Crime Agency Issues Warrant On PetroSaudi Cash!

The Race Is On As The UK National Crime Agency Issues Warrant On PetroSaudi Cash!

Scenes similar to the climax of a complex fraud movie are playing out in London – and putting an embarrassing spotlight on the law firm Clyde & Co, now facing queries about why it has continued to represent the company PetroSaudi years after it became apparent that all its funds were stolen from 1MDB?

Sarawak Report has highlighted the PetroSaudi fraud ever since publishing its first story on the heist in February 2015.  Earlier this month, according to the Guardian newspaper, the US Department of Justice re-confirmed the matter by suing PetroSaudi for the remaining $330 million (forced out of Venezuela thanks to a previous UK court judgement) – money awarded by the court in the first instance to their lawyers Clyde & Co, where it is now sitting in their escrow account.

The UK National Crime Agency has now issued a warrant, not against the law firm itself but against that money.

PetroSaudi has been pressuring and issuing legal demands against Clyde and Co to nonetheless pass on the cash, but the law firm has resisted, explains the Guardian. “Documents show the law firm said it feared criminal charges if it made any transfers from the account.”

Poor Tarek Obaid and Patrick Mahony, to have got so far only to be reduced to increasingly hopeless litigation to extract their stolen hundreds of millions against the forces of law and order not only in the US, but also the UK and in the face of their own reluctant law firm as well.

The law firm, as a final insult, will naturally be racking up their fees payable from the same escrow account – the rule being lawyers can benefit from stolen money where others can’t. Could this have happened to a more deserving duo?

So near and yet so Far

In the sort of movie where one is supposed to sympathise with the fraudsters involved in a ‘victimless crime’ the $300 million in the Clyde & Co account would represent the final stage of an amazing heist.

Back in the beginning the shell company posing as a multinational agreed together with Najib Razak and Jho Low to front up the original joint venture with 1MDB through which an eventual $1.83 billion was stolen.

PetroSaudi, controlled by Saudi Prince Turki and his pal Tarek Obaid, plus a British schoolfriend Patrick Mahony, were passed about $500 million of that.

They just needed to launder it and make it grow and then bingo it would all be theirs. Certainly, the Malaysians in charge of 1MDB were not in the business of asking for any of the money back, since they had stolen all the rest.

So, what did ‘party boy’ Tarek and ‘brains’ Mahony decide to do for stage two? Amongst other ventures they immediately targeted the next most corrupted oil state on the planet after Malaysia to make a play of investing the cash in an enterprise that at the same time provided another handy front for 1MDB.

Hiring a few grand names at top dollar to add lustre to their venture (including then MasterCard Chairman Rick Haythornethwaite as Operations Manager and even Tony Blair as a consultant) Mahony and Obaid bribed Venezuelan officials to sign possibly the world’s most advantageous one-sided contract for drilling oil.

Two unseaworthy vessels purchased by PetroSaudi were promised $500,000 a day for mining oil off the Venezuelan coast, whether they delivered any oil or not. They didn’t, since the crew soon abandoned the listing ships.

Who would blame the Venezuelans (by this time in hot pursuit of the responsible officials who’d decamped to Florida alleging political persecution) for refusing to pay the money? Which is what they did.

However, the wily lawyers for PetroSaudi had secured a so called Letter of Credit that meant Venezuela had agreed in advance to pay the money, come what may. By 2017 the scandal was well out in the open, including the full details of the Venezuelan deal as well (revealed by Sarawak Report).

But, with the policemen now knocking on their door (literally, Turki had been imprisoned in Saudi Arabia and Switzerland had opened investigations into Tarek and Mahony) the money owed in those Letters of Credit represented a remaining opportunity for these young chancers, who had entered into the game with maxed out credit cards to still exit it with fabulous hundreds of millions of dollars.

Tarek, was still living it up in Geneva and Mahony likewise was living the highlife and travelling to make new business in other salubrious corners of the earth (like Angola). How they must have lived the case day and night as they instructed Clyde & Co to go after those Letters of Credit that could still deliver $330 million, despite their notoriety and exposure.

At first the manoeuvrings were secret. Venezuela was fighting the case on the basis the contract was a fraud (which it plainly was), but no-one wanted the business aired. That changed when a British High Court judge rocked the establishment by agreeing with the Venezuelans and ruling that the Letters of Credit ought not to stand given the obvious fraud involved.

What a setback! But, PetroSaudi wasn’t giving in. They appealed and sued the likes of Sarawak Report for reporting the original judge’s remarks when the appeal went their way. Letters of Credit are promises too sacred to be undermined, the appeal judges ruled, and the appearance of fraud in this apparently not compelling enough to do so!

How the Crystal champagne corks must have popped that night at the Hotel Bristol in Geneva, Tarek’s preferred watering hole. The Portuguese bank that held the Letters of Credit duly paid the money into the escrow account at Clyde & Co as commanded by the court.

It was just a question of telling the lawyers which account to pass it on to surely? Minus a few deductions, Tarek could afford to be generous. Another crate of champagne?

Yet, as the time started ticking by in the colder light of day, tension must have started to build. Scruples may well have been prompted at Clyde & Co as the dreadful publicity around the case started to drive home. Instead of sending over the cash the lawyers started to chew their pencils and stall.

According to the Guardian a panicking Obaid hired a new lawyer and sued his old lawyer:

“PetroSaudi sued Clyde & Co late last year after the firm refused to make payments from its escrow account. Documents show the law firm said it feared criminal charges if it made any transfers from the account.”

Ouch! Had the perfect heist hit a final unsurmountable glitch?

Clearly Tarek wasn’t giving up. Back home in Geneva he was mounting a full-scale legal and charm offensive to get the Swiss to back off their own prosecutions, hiring PR agents, well-connected investigators and touting his charitable credentials, you name it.

But how his heart must have sunk as the publicity surrounding the money and his ow  corruption added to the fears haunting Clyde & Co.  And then the devastating blow – the US Department of Justice moved on Clyde & Co, just as the law firm had feared and cited the cash to be the proceeds of money laundering and theft from 1MDB.

In fact, they have identified the $330 million “about all that is left of the proceeds” of the first phase of the 1MDB fraud, say the Guardian and to make sure the money isn’t going anywhere before the issue is sorted out the UK National Crime Agency has delivered the arrest warrant (for the cash) to Clyde & Co’s London offices.

What do we reckon are Tarek’s chances of seeing the money now?

Sarawak Report suggests this may end like the kind of movie where success remains so close, but yet so far. Final toast to Xavier Justo?

Read The Guardian Article

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